Foxconn-Vedanta Split Does Not Impact India’s Semiconductor Ambitions – Here’s How

Taiwan’s Foxconn has decided to pull out of the $19.5 billion semiconductor joint venture with Indian mining company Vedanta, causing surprise and uncertainty about India’s semiconductor ambitions. However, both the government and Vedanta’s CEO, Anil Agrawal, have expressed a different perspective on the matter. Interestingly, this decision came shortly after US chip maker Micron Technologies signed a Memorandum of Understanding (MoU) with the Gujarat government. It is worth noting that the Vedanta-Foxconn joint venture had plans to establish its plant in the same state. The announcement of the split has sparked numerous inquiries and doubts.

However, Vedanta said it is committed to its semiconductor plant project and has already roped in other partners to set up India’s first foundry.

“We continue to grow our semiconductor team and have a production-grade technology license for 40nm from a major Integrated Device Manufacturer (IDM). We will soon acquire a license for production-grade 28nm as well. Vedanta has redoubled its efforts to realize the Prime Minister’s vision for semiconductors, and India remains at the center of global semiconductor repositioning supply chains,” the New Delhi-based company said.

Electronics and IT Minister Rajeev Chandrasekhar also shared his views on the matter. Taking into account the doubts and questions raised after the announcement by the Taiwanese company, he said, “This decision will not affect India’s semiconductor manufacturing ambitions.”

The minister noted that it was known that neither company had previous experience in semiconductors or technology, so they were expected to acquire fab technology from a technology partner.

Although their joint venture had initially submitted a proposal for a 28nm fab, they could not secure a suitable technology partner for the proposal, and then Vedanta through VFSL has recently submitted a 40nm fab proposal backed by a global semiconductor technology license agreement. large.

He further stated, “It is not for the government to take a position on why or how two private companies choose to partner or not, but it simply means that both companies can and will now execute their strategies in India independently and with appropriate technology. Semicon Electronics partners.”

Earlier, Union IT Minister Ashwini Vaishnaw stated that the government has revised India’s semiconductor program in September 2022 based on suggestions for the industry’s chip requirements.

The center asked applicants who submitted their applications in January of this year to change them according to the requirements and submit them again. A 40nm fab proposal was then submitted and is currently under evaluation.

Vaishnaw said such changes to the program will allow companies to focus on specific sectors and find new technology partners.

According to Chandrasekhar, “India’s strategy to catalyze the semiconductor ecosystem has made rapid progress in the 18 months since Prime Minister Narendra Modi endorsed the Indian Semicon Strategy and Policy.”

Bhartendu Mishra, executive member of the Indian Electronics and Semiconductor Society (IESA), told ReturnByte that as far as opportunities go, India is still an emerging market with rapidly growing demand across multiple sectors and the government’s efforts to set up factories here will undoubtedly increase the country’s potential and make it desirable. of the object.

“Micron’s investment and similar future investments in ATMP and OSAT are strong examples that will bring India to the level of countries like Malaysia, which have a significant presence in this space. As we continue to address the challenges of semiconductor supply chain efficiency, investment in fabs is likely to follow,” he said. .

Regarding India’s chip growth, Mishra said that for now, the country should continue to prioritize boosting electronics production to meet local consumer needs and strive to become a global manufacturing hub for international demand. According to him, this progress builds a compelling case for investors to consider India as a viable investment option.

“We are a growing market and it naturally attracts different players and we should remain confident and focus on exploiting our strengths,” he pointed out.